[MUSIC] Welcome back to our lecture on Warehouse Management Systems.
Upon completion of this lesson, learner should be able to discuss the role of Warehouse Management Systems, discuss the functions of WMS or Warehouse Management Systems And describe the benefits of WMS.
For a wide range of reasons, warehouses are complex operations. There are numerous sub-processes taking place within the facility that require close synchronization. Facilities may have hundreds, thousands, or hundreds of thousands of individual, unique items stored with millions of pieces in inventory.
A wide range of technology may be in use to track and manage the operation, and communications to external systems, such as order management and transportation management systems may be required.
With these types of complexities, it’s difficult to manage a warehouse effectively without an effective information system.
Many warehouses use a warehouse management system to manage warehouse planning, operations, inventory, and performance management activities. WMSs guide the flow of materials through warehousing functions such as, receiving, labeling, stocking, locating stock, picking, and shipping. With software functionality tailored to meet the needs of each of these functions, and the software supported by various interface technology to guide the labor force through their activities. It is hard to envision a multi million square foot parts warehouse, storing hundreds of thousands of parts, operating effectively without strong WMS functionality. WMS drives the information flows and activities associated with daily planning, organizing, staffing, directing, executing and controlling the utilization of available resources, to move and store materials into, within, and out of a warehouse.
WMS may be a stand-alone system that integrates to other corporate systems, or WMS may be a specific module of an overall ERP system such as SAP or Oracle.
In the receiving function, WMS supports rapid check-in of incoming product, advanced shipment notices may be transmitted electronically to accompany expecting a shipment. Upon arrival, the WMS can access the ASN data, and through some quick checking of shipment identifier, such as a pallet barcode label, an entire shipment from a trusted supplier may be accepted or put away.
Terminals using radio frequency communication can provide real time data to the WMS. By having visibility to all orders and their priorities, a WMS can determine which incoming product may need to be cross docked, that is immediately directed to a dock for outbound shipment. WMS also supports guiding counts and quality check of incoming materials and the labeling of the materials for put away in the warehouse or preparation for customer shipment.
In put away operations, WMS provides operators and equipment with directions regarding the specific locations to store product in.
Operators receive information via hand-held terminals or other devices regarding which row, level and slot to put product in. Operators will be asked to perform scans or other validation checks to confirm the put away location, which is then updated in the WMS. The WMS must be configured in alignment with the desired facility operating model. For example, some warehouses are designed to be random storage, others, fixed storage. In a fixed storage model, the WMS must know which specific slots to reserve for which specific items. In a random storage model, WMS must keep track of which slots are available, and assign them to incoming product.
In picking and shipping operations, WMS supports the defined operating model for picking. For example, in pick by order, an entire order may be handled by a single individual. And WMS would provide the individual instructions via portable terminal or other technology on where to go and how much to pick.
In a batch or wave picking model, multiple individuals, types and material handling equipment, and warehouse zones may be involved in filling an order.
In this case, the WMS must parcel out the pieces of the order at the right time. And direct the pieces to a common location for assembly into the complete order prior to shipment. WMS is the source of a wide range of shipping documents and staff management functions in picking and shipping.
Picking and shipping are typically the most labor-intense components of a warehouse. So, through effective sequencing, WMS can add a lot of value to these operations.
The role of WMS in managing inventory control and management is very important. WMS manages the specific slot assignments for each product in the warehouse. The WMS determines which specific slots incoming inventory is assigned to. And keeps track of the ongoing balances of inventory in each location. Along with detailed information about the inventory such as lot number, receipt date, etc.
Cycle counting is another attribute of WMS supportive inventory management. And is the process of doing sample checks of inventory to determine whether the on-hand inventory matches the level maintained in the WMS. By frequently doing cycle counts and reconciling issues as they are found, full physical inventories can be avoided. WMS provides inventory control staff with daily assignments regarding which slots to count and report back on the identified inventory levels in those slots.
WMS provides functionality to interface to material handling equipment. It sends electronic data to the equipment, providing instructions on the sequencing of orders, assignment of specific orders to specific slots, conveyor routing, etc. Once the material handling equipment is loaded with the information, systems like Carousels and Pick-To-Light guide the human labor force in picking items in the proper sequence to meet order requirements. WMS enabled deficiencies come about through optimized picking routines. Paperless operations, inventory accuracy improvement, etc, which leads to reduction in direct labor costs in each of the key components of the warehouse noted above or noted below.
WMS also impacts indirect labor. Supervisors can be much more effective with the use of WMS as WMS can provide estimates of required staffing, provide insight into team and individual performance.
Expeditors, when orders need to be expedited, WMS facilitates the rapid identification of product locations and resequencing of workload.
Inventory control, as we discussed, and indirect operation improved by WMS. Training, WMS ensures that all personnel follow the same processes, and all of this then leads to potential reduction in labor overtime.
WMS benefits the planning of warehouse operations and effective administration of these operations, including the yard operations, an often overlooked element of warehouse operations. Parking lots for incoming trucks or incoming rail spurs need to be carefully planned to ensure smooth flow in and out of the warehouse. WMS supports effective labor management for warehouses where employees are cross trained to work in multiple departments. WMS can sequence operations, so that labor can be balanced across operations leading to less requirement for overtime.
Other tangible savings brought about by WMSs include better space utilization, with the better ability to store inventory. And having more rapid visibility to warehouse space utilization, the actual space required for a given warehouse may be reduced. Transportation costs can be improved through WMS by helping to determine the best mode of transportation for each order. And providing logic to group orders going to a common destination together at a dock as a single shipment. Or group multiple shipments going to the same region together into a single truck, so that consolidated truck load shipping savings may be obtained.
Error reduction is enabled through WMS through the various verification checks that take place, each time the product is touched, leading to reduction in order pick errors, shipment errors and inventory errors. And finally, physical inventory costs are reduced through the cycle counting, that was described.
There are a wide range of savings opportunities beyond those we just mentioned that are attributed to using WMSs. Some can be directly attributed to WMSs, and others, clearly, are strongly supported by WMSs, but perhaps the benefits are not 100% attributed to WMS. These include order cycle time reduction, where WMS can provide the opportunity to accept orders from customers, at any time, immediately checking inventory availability, and if warranted, drop the orders to the warehouse floor for fulfillment. A paper-based system may take a few hours or more of processing time to accomplish this task. Customer service is improved through cycle time reduction and improved order accuracy.
Inventory turns may be improved through WMS with better confidence in the inventory accuracy, leading to an overall reduction in the believed need for additional inventory as buffer stock.
Reduced obsolescence by ensuring that old product is picked first, WMS helps reduce obsolescence. Lost orders, in a paper based environment, there’s the potential that orders may simply be lost, blown away, etc. This is much more difficult to occur in a WMS environment.
In this lesson, we discussed the role of WMS, discussed the function of WMS, and described the benefits of WMS.
Thank you for watching and we’ll see you on the next lesson. [MUSIC]
[MUSIC] Welcome back to our lecture on Warehouse Management Systems.